- Glossary
- Real effective exchange rate (REER)
Currency & Exchange
Real effective exchange rate (REER)
The real effective exchange rate weighs a currency against a basket of trading-partner currencies, adjusted for relative inflation, to gauge overall price competitiveness rather than just one bilateral rate. A rising REER means a country's exports are getting more expensive relative to its trading partners even if the nominal exchange rate hasn't moved much.
Why it matters
REER is the more complete competitiveness read than any single bilateral exchange rate can give.
Also known as: REER, real exchange rate